Celebrities hit by foreclosure crisis

WASHINGTON —
More than 1.5 million older Americans already have lost their homes,
with millions more at risk as the national housing crisis takes its toll
on those who are among the worst positioned to weather the storm, a new
AARP report says.
Older African Americans and Hispanics are the hardest hit.
"The Great Recession has been brutal for many older Americans," said
Debra Whitman, AARP's policy chief. "This shows that home ownership
doesn't guarantee financial security later in life."
Even working two jobs hasn't been enough to allow Jewel Lewis-Hall,
57, to make her monthly mortgage payments on time. Her husband has made
little money since being laid off from his job at a farmer's market, and
Lewis-Hall said her salary as a school cook falls short of what she
needs to make the payments on her home in Washington.
Lewis-Hall and her husband have been making their payments late for
about a year, but panic didn't set in until recently, when the word
"foreclosure" showed up in a letter from the bank.
"You're used to living a certain way, but one thing leads to
another," Lewis-Hall said. "It's not like I have a new car or anything.
I'm driving one from 1991."
According to AARP:
■ About 600,000 people who are 50 years or older Americans are in foreclosure.
■ About 625,000 in the same age group are at least three months behind on their mortgages.
■ About 3.5 million - 16 percent of older homeowners - are
underwater, meaning the home value has gone down and homeowner now owe
more than their homes are worth.
AARP said that over the past five years, the proportion of loans held
by older Americans that are seriously delinquent jumped by more than
450 percent.
Homeowners who are younger than 50 have a higher rate of serious
delinquency than their older counterparts. But the rate is increasing at
a faster pace for older Americans than for younger ones, according to
AARP's analysis of more than 17 million mortgages.
Americans who are 50 or older are hard-pressed to recover from the
collapse of the housing market that started in 2006 and was compounded
by the recession that started in 2007. Eight in 10 of them own homes,
but many live on fixed incomes, have little savings or have already
burned through much of their retirement savings. They also have fewer
working years left to build back what they may have lost.
And those who are forced to re-enter the workforce often find they can't command the same salary that they did in the past.
Older minorities are facing foreclosure rates that are almost double
those faced by white borrowers of the same age, mirroring a nationwide
trend seen in other age groups as well. Among older African Americans,
3.5 percent were in foreclosure at the end of 2011, and the rate was 3.9
percent for Hispanics. Just 1.9 percent of white homeowners were in
foreclosure.
The issue has become so dire in Rep. Elijah Cummings' Maryland
district that he has assigned one of his 20 staffers to work fulltime to
help struggling homeowners, and his office holds regular foreclosure
prevention workshops. He said the federal government can do its part by
promoting principal reduction and loan modification programs.
"These are people who in many instances have never missed a payment
in 20 years," Cummings, a Democrat, said in an interview. "You see grown
men crying because of the potential loss of a home."
Among older homeowners, those who are 75 or older are in the worst
shape when it comes to foreclosures, the report showed. In 2007, one out
of every 300 homeowners 75 or older was in foreclosure. Five years
later, about one in 30 face that same fate.
Many of those oldest homeowners may have lost income they were
counting on, such as the retirement benefits of a deceased spouse. In
the meantime, their mortgage payments have stayed the same.
The situation is likely to get worse before it gets better, AARP
officials predicted, because of a housing market that is recovering at a
snail's pace.
"This crisis is far from over," Whitman said. "We need to think about more creative solutions now that we have this data."

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